The U.S. economy is poised to enter 2016 with solid momentum. Real gross domestic product growth this past year slightly topped the average for the previous five and a half years of this recovery, but with a great divide.Overall economic growth managed to slightly edge out growth during the prior year, despite the plunge in […]
The U.S. economy is poised to enter 2016 with solid momentum. Real gross domestic product growth this past year slightly topped the average for the previous five and a half years of this recovery, but with a great divide.
Overall economic growth managed to slightly edge out growth during the prior year, despite the plunge in oil prices early in the year and the resulting pullback in energy exploration and related investment.
Other parts of the economy that are closely tied to the global economy also faced disappointment in 2015, as weakening foreign demand and a stronger dollar battered exports and large multinational firms.
Mining and agriculture also were adversely impacted, as lower prices cut into output and earnings. Areas less closely tied to the global economy, such as retail trade, the leisure and hospitality sector and health care, fared considerably better.
We expect the economic tale of two economies to remain in place during 2016. For those parts of the outlook tied primarily to the domestic economy, 2016 is likely to see better times. For those areas closely tied to the global economy, the economic environment will be more challenging.
Fortunately, most of the U.S. economy is tied to domestic economic conditions and fiscal policy will also likely be more supportive of growth now that Congress has enacted a budget that allows for modest gains in defense and non-defense discretionary spending.
[See what others are saying on HBJ's Economic Forecast 2016 page]
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